Sunday, September 1, 2013

Happy Labor Day II - To All of the Docs on the Assembly Line

Last year I posted a Labor Day greeting to all of the docs laboring in American medicine. I used the assembly line metaphor for obvious reasons - physicians were no longer being treated like knowledge workers but were being treated like assembly line workers. Circumscribed patient visits were the widgets. In the case of proceduralists the procedure was the widget. One of my friends referred to himself as a "scope monkey" based on the expectation for the number of procedures he was supposed to produce every year. Have there been any substantial changes in the last year?

The bad news is that there have not been. Managed care continues to consolidate its monopoly. The final product under the Affordable Care Act (PPACA) will result in unprecedented leverage on the part of that industry over physicians and patients. I often compare the healthcare industry to the financial services industry when it comes to an example of government determined monopolies. The 401K is a great example of how this works. The 401K was sold to the American public as a great way to save for retirement. When the choices in 401K were limited it was sold as a way to simplify the 401K for most people. The truth about 401Ks is that they have not been a very successful investment vehicle. They put trillions of dollars of retiree savings at risk and the fees they charge are even more outrageous than medical fees. I just looked at a bond fund prospectus this morning that shows on an investment of $10,000 I could expect to pay $1,000 in fees every 10 years. Considering that there are about $9 trillion dollars in 401Ks and IRAs that generates about a trillion dollars in fees (about $90 billion a year) for the financial services industry. Those fees are generated independent of the general goal of retirement funds - actually having money for retirement. My prospectus has the usual disclaimer: "The value of your investment in the fund can go up or down. You can lose money by investing money in the fund." As many baby boomers found out that can be 30-40% of your principal.

How does managed care compare? The most interesting game has been the idea that all fees will increase substantially with the implementation of the PPACA. This bill allows for unprecedented merger and efficiencies. It allows for only 80% of the health care premium to be devoted to the actual provision of health care services. It is logical to assume that a greater percentage of the health care dollar devoted to health care would also decrease premiums. There will be significant hidden savings associated with a model of care that is integrated and minimizes the amount of physician billing. Insurance company rhetoric suggests that provided additional services to the uninsured with no limitations on pre-existing conditions will more than cancel out the monopoly advantages. If that was true why lobby for large monopolies?

One of the indicators to me of just how much leverage the managed care industry has is the expected out of pocket costsfor a retired couple on Medicare. That number is currently $220,000 not including nursing home costs. That is roughly more than four times the average retirement savings for most Americans.

The financial services industry and the medical industry are basically government mandated hidden taxes on the American people. In exchange for that huge subsidy we get an industry that charges us significant fees to place our retirement funds at risk all of the time and another industry that rations health care and charges whatever they want in order to make money. In the case of the medical industry the overriding philosophy is not consistent with an enlightened approach to employees that probably know a lot more about the provision of quality medical services than the administrators.

That conflict of interest is central to the deterioration of the practice environment and a diminished focus on quality care and a continued focus of the study and academic aspects of medicine. Having medical care dictated by administrators using business guidelines or managed care reviewers using the same approach is demoralizing. Unless this conflict of interest is adequately addressed - the focus of health care will be turning out widgets. Only the widget producers will be valued. Administrators making arbitrary decisions run the whole show.

All of this remains decidedly grim in terms of the practice environment where most physicians work. It is only fair to consider some solutions. I will try to avoid the political decisions I have advanced in APA and other medical forums over the past 20 years. Physicians are uniquely oblivious to the fact that the science of medicine is routinely trumped by business and politics. Are there any possible solutions? For many years private practice was always considered an option. With the PPACA that route will be more difficult because the solo practitioners and groups will probably be off the network and professionally isolated, but some will be able to practice in this environment. There is still niche work where physicians can be paid professional salaries and still have adequate time to complete all of the administrative tasks and focus on quality work, but they are rare.

A single exciting model that I think can disrupt the usual managed care and government restrictions that I expect to flow from the PPACA comes from the University of Wisconsin and their Memory Clinics approach. This is a statewide network of clinics focused on providing state-of-the-art and quality care across a number of settings. Guidelines, continuing education, and consultation is provided from a University based department and there is a minimum requirement for for ongoing education every year. I don't see why this model cannot be widely applied across psychiatry and all other medical specialties. It brings the academic focus back into medicine instead of the current focus by governments and business. The practice environment of medicine needs this academic focus and it would greatly enhance the practice environment and get us out of widget production.